John Huffman President and Chief Executive Officer

Ms. CecilyBeall District Department ofthe Environment Air Quality Division 1200 First Street, N.E., 5th floor Washington, D.C. 20002 

# epco Energy Services

August 30, 2010

Re: District ofColumbiaProposed Regional Haze State Implementation Plan
DearMs. Beall: Pepco Energy Services, Inc. ("PES") appreciates this opportunity to comment upon the proposed District ofColumbiaRegional Haze State ImplementationPlan ("SIP") final draft dated July 14, 20I0 prepared by the Government ofthe District ofColumbia, DistrictDepartment ofthe Environment ("DDOE"). Potomac PowerResources, LLC ("PPR"), a wholly owned subsidiary ofPES, owns the Benning Road Generating Station ("BRGS"), which was specifically discussed in the SIP. PES manages the assets ofBRGS on behalfofPPR. PES is a wholly owned subsidiary ofPepco Holdings, Inc. BRGS consists oftwo oil-fired steam generators, Units 15 and 16, which operate to produce electricity. Units 15 and 16 were installed in 1968 and 1972, respectively. BRGS is scheduled to be retired and shut down on June 1,2012, and in coordinationwith the SIP, PES has agreed to a legally enforceablepermit conditionrequiring a shut down ofBRGS on orbefore December 17, 2012, subject to the terms and conditions referred to in the SIP ("required shut down date"). We understand that the permit condition described in the SIP will be reflected in the Title V air permit currently being drafted by the DDOE for review byPES. This letter acknowledges PES' support ofthe proposed SIP rules concerning BRGS. See, generally, Section 9.6. Inparticular, PES agrees with the exemption ofBRGS from eligibility for BestAvailable Retrofit Technology ("BART") Section 169A ofthe Clean Air Act as described in Section 9.6.4. PES agrees that the Title V pelmit condition requiring closure of BRGS by December 17,2012 is sufficient to exempt BRGS from BART. The required shut down date will occurnot later than 5 years after the SIP would have been due to be approved by the Environmental ProtectionAgency. In other words, closure ofBRGS byDecember 17,2012 renders the BRGS exempt from the BART requirement. PES is pleased that the retirement of BROS meets the intent ofthe Regional Haze Rule. In addition, the emission reductions achieved by closure ofBRGS will contribute to the progress goals established in the Mid-Atlantic and Northeast

- Visibility Union's ("MANE-VD's") long-term strategy.

1300North 17th Street· Suite 1600 •Arlington· /ljI. 22209 • 703-253-1753 •Fax 703-253-1803 • www.pepcoenergy.com Pepco Ellergy Services, Inc. is not the same company as Potomac Electric Power Company (Pepco), the regulated

utility, andprices alldservices of Pepco El1e7gy Services, Inc. are notset by the Public Service Commission.Ms. CecilyBeall August 30, 2010 Page 2

As a result ofthe retirement ofBRGS that was announced in 2007, PlM and the affected transmission and distribution owners identified a number ofnecessary upgrades to the transmission and distribution systemto compensate for the shut down ofthe BRGS. However, inthe unlikely event that these upgrades are not completed on a timely basis or ifelectric loads were to grow at a significantly higher pace than expected, it is possible that BRGS would be required to remain open after the scheduled retirement date, and possibly beyond December 17, 2012

. Should the BRGS remain open after December 17,2012, PES acknowledges that BRGS would be subject to a de minimis cap on actual emissions ofPMlO of 15 tons per year as identified in the SIP, as will also be specified in the Title V airpermit. PES respectfully disagrees that its BART analyses provided in October 2008 and April 2009 were insufficient. However, provided that BRGS is treated as described inthe proposed SIP, PES will not contest the asserted insufficiency ofthe BART analyses. Sincerely,